Author Archive for kevin

The Foreclosure Timeline

Published
by
kevin
on December 15, 2008
in Banks, Government and Lending
. 0 Comments

Starting September 8, 2008, California has a special foreclosure timeline for loans originated between 2003 and 2007, which are secured by owner-occupied residences.  Loans involved in short sales are likely to be owner-occupied loans from the years 2003 to 2007, which was the heyday for sub-prime lending.  The special foreclosure timeline does not apply if the borrower has filed for bankruptcy, surrendered the property, or contracted with a person or entity whose primary business is advising people, who have decided to leave their homes, on how to extend the foreclosure process and avoid their contractual obligations.  The special foreclosure timeline will remain in effect until January 1, 2013.


Day 1: Lender Contacts Borrower


For owner-occupied loans from 2003 to 2007, a lender initiating the foreclosure process must generally contact the borrower by phone or in person to assess the borrower’s financial situation and explore options for avoiding foreclosure.  During the conversation, the lender must inform the borrower of the right to meet with the lender within 14 days.  The lender must also give the borrower the toll-free number for finding a HUD-certified housing counseling agency.


Day 31: Filing of Notice of Default


For owner-occupied loans from 2003 to 2007, the lender may file a notice of default 30 days after contacting the borrower to explore options for avoiding foreclosure.  The notice of default must be filed in the county where the property is located and a copy must be mailed within 10 business days after recordation to the borrower and all other persons who have requested such notice.  The notice of default informs the borrower of the default.  It must also include the lender’s declaration that it has contacted the borrower to explore options for avoiding foreclosure, attempted to contact the borrower, or the borrower has surrendered the property.


Day 121: Filing of Notice of Trustee’s Sale


Three months after the filing of the notice of default, the lender may record a notice of trustee’s sale setting forth the date, time, and place of the upcoming trustee’s sale. The notice of trustee’s sale must be recorded, posted, mailed to the borrower and others, as well as published once a week for three consecutive weeks in a newspaper of general circulation.


Day 145: Deadline to Cure Default


Up to five business days before the trustee’s sale, the borrower may reinstate the loan by curing the default or paying the missed payments plus allowable costs.  After the reinstatement period expires, the borrower still has the right to redeem the property by paying the entire debt, plus interest and costs (not just the arrearage), before the bidding begins at the trustee’s sale.


Although California law allows a trustee’s sale to take place 20 days after the posting of the notice of trustee’s sale, lenders customarily wait at least 31 days instead to help protect against federal tax liens.  At the trustee’s sale, the property is sold through a public auction to the highest bidder.

Contact a qualified REALTOR® EARLY on in this process (ideally before missing a payment) to ensure all options for avoiding foreclosure are identified.

Kevin

Conforming Loan Limit Adjustment

Published
by
kevin
on November 11, 2008
in Banks and Lending
. 1 Comment

Before this year, one conforming loan limit applied to the entire country. The amount was $417,000 for a single family unit (since 2006). When Congress allowed for the increase in February of this year, it was done so based on 125% of an areas median home price. The floor was set to $417,000 and the ceiling to $729,750. This temporary increase was to sunset at the end of 2008.

In July the law became permanent, but the formula was changed. It became 115% of an area’s median home price with a floor set by the government and the ceiling equal to 150% of the floor. Last Friday, the Housing Finance Agency said the floor would remain $417 for 2009 which would then put the ceiling at $625,500.

The conforming limit for Monterey County has been set to $483,000 for 2009. In contrast, the Oakland / San Francisco Market have a limit of $625,500 as does Los Angeles, Santa Cruz and Watsonville. What will this do to the already struggling market in Monterey County? For those looking to take advantage of a traditional conforming loan, a down-payment of 35% on a $750,000 purchase would be needed, significantly impacting the pool of buyers positioned to purchase.

Part of the benefit of MCAR membership is the opportunity to take advantage of market professionals who truly understand the dynamics associated with their field of expertise. This week, I was fortunate enough to be able to discuss this issue in great depth with one of our members, Linda Guy. Given the constant fluctuation of the market throughout the country, it seemed to make sense to establish a national conforming limit, high enough to meet the needs of the higher priced communities and counties in the nation, while providing a more accurate model for monitoring success annually. This in turn would eliminate the need for limits established regionally or by area, a formula that is certainly prone to dysfunction as we’ve seen illustrated above.

Buyers would need to qualify under typical lending qualifications and property would appraise locally, establishing an accurate market value.

There are rumblings in Congress that an extension of the $729,750 conforming rate is being contemplated for 2009. Whether or not this comes to fruition by years end is anyone’s guess. A legislative adjustment that would establish a singular national conforming loan limit is needed.

Your input is desired and appreciated as we pursue a dialogue with those in Congress. Please let us know your thoughts by utilizing the MCAR Blog.

Kevin

Voters Inspired

Published
by
kevin
on November 5, 2008
in Lending and Uncategorized
. 0 Comments

I am sure many of you have heard of the campaign to “Get Out The Vote” or GOTV - it is a reference to each political party’s attempts to energize their voting base through various activities. Republican or Democrat, no doubt there was a GOTV effort in your city or town.

GOTV efforts produced results not seen in a very long time. There are many different reasons why educated and even passionate people fail to make it to the polls for each election. Some say low voter turnout represents a lack of trust in government. However, this year, this Presidential Election, it can be said unequivocally that voters were inspired and ready to see this Nation move in a new direction.

In the past few years we’ve seen a special election to unseat a Governor, a contentious Presidential race, major bond campaigns and raucous political infighting. At some point, voters reached maximum exposure and decided it was time to do something about it. Casting votes in droves, Republicans and Democrats alike took advantage of the very right which makes this country so special, they voted.

It turns out that the economy was the driving factor of importance in this year’s election. Given the current economic situation in the country and here locally, it’s no wonder why this issue played such a large role in how citizens cast their vote. As the excitement and drama associated with this historic Presidential Campaign begins to subside, the reality associated with the task at hand for our new President-Elect and Congress will become ever clearer. The new voting demographic will be watching closely as this country, under new leadership, begins pursuing policies for the future.

The tide on voter apathy has changed course. Regardless of party affiliation, every American should feel a sense of great pride for the turnout enjoyed on November 4th.

Kevin

Taxation vs. the Economy

Published
by
kevin
on August 29, 2008
in Government and Salinas
. 0 Comments

This week, both proponents and opponents anxiously awaited the results of Measure W, Salinas Valley Memorial Hospital’s $400 million bond effort. Much to the hospital’s dismay, the effort failed. The real news story here however, is not that the measure failed, it is that its’ failure was not unique. That same night, three hours east of Salinas in a small town named Oakdale, Oak Valley Hospital awaited the voters’ decision on their bond effort and received the same results.

District Hospitals all over the state are rushing to meet state seismic requirements by 2013 and in their quest to raise taxes in order to meet a legislative mandate, they are bumping up against what I like to call the Bond Ceiling. Looking across the state it appears as though somewhere in the last two years voters have lost their tolerance for self-taxation and managed to erect a ceiling that nary a public agency has yet to break through. Tough economic times are upon us all, our houses are worth less, our cars and groceries cost more and our jobs are not keeping up with the cost of living. The excesses of the late 90’s and early 2000’s have caught up with the energy industry, the banking industry, Wall Street and now the average American. Unlike its’ big corporate brothers, the average American, with less than $1000 in savings, is unable to pull out of the rut very quickly. Alas, the only thing the average person can control is the measure to which he or she will tax themselves.

So here is my question: is the post Prop 13 California, coupled with an economic downturn, a place where no bond can be passed for the foreseeable future? If so, what are special districts and municipalities to do? While I don’t think there is one right answer to this question, a possible answer might be: nothing. Well, maybe not nothing, but very little…let me explain.

Financial experts will tell you if you don’t have money, don’t spend money. As such, in lean economic times certain projects should be put off until a person has more disposable income. For example, in lean times when the kitchen sink breaks, you pay to fix the sink. When your house was worth 30% more and your sink broke, you may consider taking the opportunity to remodel the kitchen. The average person can appreciate the distinction between a necessary repair and a job that can wait.

It appears that local governments have entered into very lean times, along with the rest of the country. The voters are saying they won’t tolerate big projects and big spending by government because they themselves aren’t spending. Yes, this means deferring some projects that would be really nice to have done, like the building of better roads and new schools. But if government is of the people and for the people, shouldn’t it be like the people? Eventually, the economy will progress and people will begin to shout for better streets and bigger schools, and as such, maybe they will then be willing to pay for it.

Welcome to the NEW MCAR Blog & Forum!

Published
by
kevin
on August 18, 2008
in Uncategorized
. 0 Comments

Welcome to the new MCAR Blog & Forum! The goal of this new informational site will be to engage the real estate industry and public on the ongoing challenges and successes of this dynamic industry. We encourage you to take the time to register and comment on the various articles and editorials that will be posted throughout the week.

This site will remain a work in progress as we solicit your input and feedback as to it’s usability and functionality. A “Members Only” section is soon to follow, providing a vehicle for feedback on advocacy efforts, membership and real estate issues. As an MCAR member, you will have the opportunity to engage your collegues and MCAR staff on current market dynamics, challenges and successes in an enviornment exclusive only to MCAR members.

We look forward to hearing from you, enjoy!

Kevin

The Incentivised Approach

Published
by
kevin
on July 23, 2008
in City of Monterey, Government and Green
. 0 Comments

California is changing. Californian’s typically take the role nationally of being the facilitators of change. Whether its race, religion, sexual orientation, politics or the environment, California typically leads the way - for better or for worse. Unfortunately, as we continue to evolve, governments have begun adopting onerous policies or mandates in an effort to achieve desired results and achievements without fully vetting the long term cost or impacts of the adopted policies. The lack of thorough analysis and forethought of consequences has left many of us confounded. There appear to be workable solutions readily available and awaiting implementation without the need for additional bureaucracy.

So, what’s the solution? Cities are driving agendas that demand a change in the way business, real estate and development are done within their boundaries. It is imperative that we engage ourselves in this process and provide the essential data and analysis needed for proper decision making and if necessary, policy change. But unfortunately this isn’t always enough. How do we adequately address local government concerns while maintaining proper boundaries in regards to our interests?

Providing incentives as a primary tool to facilitate change seems like a straightforward concept. It’s simple in its implementation and does not restrict or impose detrimental policy changes. In most instances, it actually provides a more efficient vehicle for delivery of the proposed solution. By incorporating incentives, you provide for the opportunity of voluntary gifting of the desired service. At the very core of this approach lies the true key to its success. It’s simply human nature to work progressively towards a goal when there is a benefit in achieving it. On the other hand, mandates for performance are generic and when doled out they usually elicit the minimum output. The private business sector exceeds in the areas of creativity and service delivery. So why not let business do what it does best? Providing incentives is the way to achieve success. We all want projects that will benefit our communities and this certainly seems like a better use of resources than a set of mandates that only half helps everyone.

The city of Monterey recently adopted a new set of Green Building Regulations. All new construction and remodels, both commercial and residential will be subject to either the Leadership in Energy and Environmental Design (LEED for commercial) or the Build It Green (BIG for residential) standards with subsequent adherence to an adopted green point rating system. The new regulations will be phased in over a year with the first year being voluntary, incentivising adherence to the new policy with such things as: expedited permitting, flexibility in setbacks and receiving priority inspections. The incentives approach certainly makes the new level of reg’s somewhat more palatable, but what happens after the year long phase-in sunsets? All projects will require the new green standards and the incentives either disappear or lose their benefit altogether. The imagined panacea now has the potential to negatively impact the overall intent of those who originally conceived and subsequently adopted the policy. I’m sure you can imagine the desire of some to circumvent the new requirements only to pursue improvements void of the appropriate permitting process.

This is certainly not a judgment on either the LEED’s or Build it Green programs. Both have proven to be beneficial and have delivered levels of success in achieving energy efficiency and environmental benefit. This is however an opportunity to evaluate the level of success prior to the mandatory green building standards taking effect a year from now.

“Green” is the new “Black”

Published
by
kevin
on July 16, 2008
in Green
. 2 Comments

Recently, it seems like every product and company out there is jumping on the “green” bandwagon. With all of the feel-good promotional ads and new green products out there, it can be hard to differentiate between what may be “green plated” and what is truly a sustainable, environmentally - friendly product. Marketers are smart and understand that “green is the new black.” So buyers seeking true environmentally sound products must be smarter.

First off, the expectations of “going green” and the focus of one’s efforts on changing lifestyle behaviors and patterns to accommodate this choice need to be reigned in somewhat. There are very few 100% green products available on the market - contrary to what some may want you to believe. Many products are sustainable in some ways, and not so sustainable in others. Chances are, you’ll need to decide what green attributes are most important to you. Is it recycled? Is it durable? What is its’ carbon footprint all the way down to the production process? These are just some of the choices you have in front of you.

The topic of green building and residential energy efficiency has gone far beyond just the environmental community - becoming not only a relevant issue among mainstream building industry professionals, but an imperative discussion to be had in the real estate business. One of the most common concerns being: the true costs and benefits associated with “going green”.

Many California based builders have stated that the costs associated with green building have traditionally been prohibitive - resulting in expenses 10-20 percent more than that of traditional construction. However, many green advocates claim that the costs are negligible when compared to the value recaptured through water and energy savings, health benefits and environmental impacts.

Roundtable discussions are taking place across the state with Realtors® and industry professionals to strategize and conceptualize a reasonable approach to implementing an incentive based energy efficiency methodology in existing residential communities. While the task is certainly daunting, it is somewhat comforting to know that many energy efficient measures can be undertaken on a meager to modest budget with efficiency returns more than making up for the initial investment made.

One such group, “Step Up to Green”, is made up of local professionals throughout Monterey County. From municipal staff, sustainability professionals, water experts, local business owners and more, the brain trust behind the “Step Up to Green” program is certainly robust. The incentive based platform focuses on what homeowners can do to achieve energy efficiency. The common-sense approach is attainable, and with adequate public support, a viable program producing tangible results could be seen sometime early next year.

The environmental impacts of residency in Monterey County are being studied, evaluated, researched and tested by both industry advocates and environmental policy groups. As the global climate change debate continues - it will be imperative for our industry to be on the front lines of these discussions. A voluntary, pro-active approach on our behalf will undoubtedly serve as a long term benefit in this dynamic endeavor. While residential energy efficiency standards certainly aren’t the requirement today in most areas, it is understood by most that it will be in the near future. Our efforts to lead the way in research and best practices today will certainly help to achieve realistic, achievable, science derived solutions for the future.

Here at MCAR we are taking both the green movement and the interests of our membership seriously. We will continue to engage you all in the process and elicit response and feedback in our continuing “green endeavors’. I look forward to updating you all in the near future.

While the green benefits associated with any given product are certainly noted and appreciated, there are implicit environmental costs directly related to the production of these products and materials that should be taken into consideration when performing a true environmental analysis. I challenge you take a few minutes to do a little research before making up your mind one way or the other on a given green product or energy efficiency strategy.

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